A Monopolistic Competitive Firm Differentiates Its Product (From Similar Products)

question 170

Multiple Choice

A monopolistic competitive firm differentiates its product (from similar products) in the minds of the buying public. As a result, the firm

• A)may earn positive economic profits, even with easy entry into the industry.
• B)will definitely earn positive economic profits.
• C)will be able to lower its costs below that of its competitors.
• D)finds that its fixed costs are sunk costs.
• E)a and c

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Definitions:

Forecasting

The process of making predictions about future events or trends based on data analysis and modeling.

Labor Demand

The total number of hours of employment that employers are willing to hire at a given wage rate, in a specific period.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate in a specific time period.

Realistic Job Preview

Background information about a job's positive and negative qualities.